Even if European politicians ‘get their acts together,’ the eurozone crisis will not be solved by a new ‘Fiscal Compact’ obsessed with austerity, i.e. tight rules for all member states on their spending. The agreement, which is intended to save the single currency, is not a “fiscal” anything, since that word usually refers to government spending. The plan is really an Austerity Compact – an attempt address economic malaise based on upside-down thinking.

And it won’t work. Because as John Maynard Keynes revealed, the worst thing that a government can do during a recession is to lower spending. And yes, all of Europe is in a recession, and probably a depression soon. Private investment spending is cyclical in nature — too much during up-boom periods and too little during down periods. That’s why government spending must act as a counter-balance. Instead, what we have seen is government actions fueling private sector spending (with lower interest rates and lower taxes) in boom periods (like the 1990s), and now withdrawing spending during the recessionary period when there is not enough private investment.

This is exactly the opposite of what should happen.

But the main problem with the ‘Austerity/Fiscal Compact’ solution is not just that it won’t work for Keynesian reasons, but that it is based on exactly the wrong diagnosis of the problem. The austerity solution assumes that the problem with countries like Portugal, Ireland, Italy, Greece, and Spain (PIIGS) that are peripheral to the eurozone (and the list is growing) is that they ‘spent too much.’ As I have now argued endlessly in various media outlets, this idea is completely false. In fact, the pre-crisis deficits of all EU countries (except Greece) were in line with the target rates of 3-4%. Deficits started to rise in 2007 after government spending rose to fund stimulus packages and bailouts. If you look at Spain, currently one of the most problematic countries, you will find that it had one of the lowest deficits before the crisis, and even one of the lowest ratios of debt to economic output (debt-to-GDP).

Growth and Speculation are the True Culprits

Instead, the real problem has been two-fold: a growth crisis and a speculation crisis.

Fueled by billions of tons of greenhouse pollution, a surge of record warmth has flooded the United States, shattering records from southern California to North Dakota. “Temperatures have reached up to 40 degrees above early January averages in North Dakota,” the Weather Channel reports. Cities are seeing late-April temperatures at the start of January — Minot, ND hit 61 degrees, Aberdeen, SD hit 63 degrees, and Williston, ND hit 58 degrees, all-time record highs for the month of January.

Daily record highs have been set in Des Moines, Iowa (65 degrees), Rapid City, S.D. (73 degrees), International Falls, Minn. (46 degrees), St. Louis, Mo. (66 degrees) and Fargo, N.D. (55 degrees), to name a few locations. Although the record warmth subsides on Friday for the Plains, the mild air mass will bully its way eastward. We’re talking temperatures in cities such as Minneapolis, Milwaukee, Chicago, St. Louis, Indianapolis, Detroit and Cincinnati enjoying highs on the order of 10-to-20 degrees above average. High temperatures around 5-to-15 degrees above average will make it all the way to the East Coast including New York City, Washington, D.C. and Charlotte, N.C.

“There has never been a 60 degree temperature recorded during the first week of January in Minnesota’s modern climate record.” Southwestern Minnesota reached the lower 60s.

In many parts of US, it’s a winterless wonderland

PORTLAND, Maine — The big snowstorms of autumn are just memories in New England, where people who make their living off winter tourism are losing income and New Hampshire primary candidates lack picturesque winterscapes for photo ops. Tourists in the West play golf instead of skiing. In Midwestern hockey country, you can barely slog a puck through the slush.

A continuing dearth of snow in many U.S. spots usually buried by this time of year has turned life upside down. The weather pattern that left many northern states with a brown Christmas is still sticking around, and the outlook for at least the next week is bleak for winter recreation enthusiasts.

Nationwide, the lack of snow is costing tens of millions of dollars in winter recreation, restaurant, lodging and sporting goods sales, experts said.

“It’s Mother Nature. She’s playing tricks on us, or something. Now it’s getting nerve-racking,” said Terry Hill, whose cash flow is nonexistent because her rental cabins are empty at Shin Pond Village, north of Maine’s Baxter State Park, normally alive this time of year with the buzz of snowmobiles.

It happened again. Another pharmacy in Texas — this time a CVS — refused to sell emergency contraception to a man who sought to purchase the product for his wife. Jason Melbourne sought the medication at a Mesquite, Texas CVS, only to be confronted by a pharmacist, and her supervisor, who refused to sell him the medication because he is a man. The pharmacist demanded that Melbourne’s wife accompany him to the store, despite the fact that she was home with their two young children. Luckily, he was able to eventually purchase the medication from a nearby store without incident.

In 2010 and 2011, we saw a wave of discrimination like this at pharmacies in Texas, Oklahoma, and Mississippi. We thought that this unfortunate trend was over, and that pharmacies heard our earlier message loud and clear: men and women who make healthy family planning decisions should be supported, and unnecessary obstacles to accessing emergency contraception cannot be tolerated given that time is of the essence to avoid an unintended pregnancy. Emergency contraception is most effective the sooner a woman takes it, and its effectiveness decreases every 12 hours. It is therefore crucial that a customer access emergency contraception as soon as it is needed.

So we’ve sent a letter to CVS, reminding them that FDA guidelines specifically say that both men and women who are over 17 years old may purchase emergency contraception without a prescription, and asking that CVS ensure that this doesn’t happen again. We hope that CVS does the right thing, and we hope we see an end to this disturbing trend in 2012.

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